Intrinsic value of Chart Industries, Inc. - GTLS

Previous Close

$76.70

  Intrinsic Value

$25.30

stock screener

  Rating & Target

str. sell

-67%

Previous close

$76.70

 
Intrinsic value

$25.30

 
Up/down potential

-67%

 
Rating

str. sell

We calculate the intrinsic value of GTLS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.70
  7.43
  7.19
  6.97
  6.77
  6.59
  6.43
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.36
  5.33
  5.30
  5.27
  5.24
  5.22
  5.19
  5.17
  5.16
  5.14
  5.13
Revenue, $m
  1,167
  1,254
  1,344
  1,438
  1,535
  1,637
  1,742
  1,852
  1,966
  2,085
  2,208
  2,337
  2,472
  2,613
  2,760
  2,913
  3,073
  3,241
  3,416
  3,599
  3,791
  3,991
  4,202
  4,422
  4,652
  4,894
  5,147
  5,413
  5,691
  5,983
Variable operating expenses, $m
  886
  949
  1,014
  1,083
  1,153
  1,227
  1,304
  1,383
  1,467
  1,553
  1,607
  1,701
  1,799
  1,901
  2,008
  2,120
  2,236
  2,358
  2,486
  2,619
  2,759
  2,905
  3,058
  3,218
  3,386
  3,561
  3,746
  3,939
  4,141
  4,354
Fixed operating expenses, $m
  198
  203
  207
  212
  216
  221
  226
  231
  236
  241
  246
  252
  257
  263
  269
  275
  281
  287
  293
  300
  306
  313
  320
  327
  334
  342
  349
  357
  365
  373
Total operating expenses, $m
  1,084
  1,152
  1,221
  1,295
  1,369
  1,448
  1,530
  1,614
  1,703
  1,794
  1,853
  1,953
  2,056
  2,164
  2,277
  2,395
  2,517
  2,645
  2,779
  2,919
  3,065
  3,218
  3,378
  3,545
  3,720
  3,903
  4,095
  4,296
  4,506
  4,727
Operating income, $m
  84
  103
  123
  144
  166
  189
  212
  237
  263
  290
  355
  385
  416
  448
  483
  518
  556
  595
  637
  680
  726
  774
  824
  877
  933
  991
  1,052
  1,117
  1,185
  1,256
EBITDA, $m
  155
  177
  199
  223
  248
  274
  301
  329
  359
  389
  421
  455
  490
  527
  566
  606
  649
  693
  740
  789
  840
  894
  951
  1,010
  1,073
  1,139
  1,208
  1,280
  1,357
  1,437
Interest expense (income), $m
  6
  29
  34
  38
  43
  47
  52
  57
  63
  68
  74
  80
  86
  93
  100
  107
  114
  122
  130
  138
  147
  156
  166
  176
  187
  198
  210
  222
  235
  248
  262
Earnings before tax, $m
  54
  69
  85
  101
  118
  136
  155
  175
  195
  216
  275
  298
  323
  349
  376
  404
  434
  466
  498
  533
  569
  608
  648
  690
  735
  781
  831
  882
  937
  994
Tax expense, $m
  15
  19
  23
  27
  32
  37
  42
  47
  53
  58
  74
  81
  87
  94
  101
  109
  117
  126
  135
  144
  154
  164
  175
  186
  198
  211
  224
  238
  253
  268
Net income, $m
  40
  50
  62
  74
  86
  99
  113
  127
  142
  158
  201
  218
  236
  255
  274
  295
  317
  340
  364
  389
  416
  444
  473
  504
  536
  570
  606
  644
  684
  726

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  2,045
  2,197
  2,354
  2,518
  2,689
  2,866
  3,051
  3,243
  3,442
  3,651
  3,868
  4,094
  4,330
  4,576
  4,833
  5,101
  5,382
  5,675
  5,982
  6,303
  6,639
  6,990
  7,358
  7,744
  8,148
  8,571
  9,015
  9,479
  9,967
  10,478
Adjusted assets (=assets-cash), $m
  2,045
  2,197
  2,354
  2,518
  2,689
  2,866
  3,051
  3,243
  3,442
  3,651
  3,868
  4,094
  4,330
  4,576
  4,833
  5,101
  5,382
  5,675
  5,982
  6,303
  6,639
  6,990
  7,358
  7,744
  8,148
  8,571
  9,015
  9,479
  9,967
  10,478
Revenue / Adjusted assets
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
Average production assets, $m
  778
  835
  895
  958
  1,023
  1,090
  1,160
  1,233
  1,309
  1,388
  1,471
  1,557
  1,646
  1,740
  1,838
  1,940
  2,047
  2,158
  2,275
  2,397
  2,525
  2,658
  2,798
  2,945
  3,099
  3,259
  3,428
  3,605
  3,790
  3,985
Working capital, $m
  203
  218
  234
  250
  267
  285
  303
  322
  342
  363
  384
  407
  430
  455
  480
  507
  535
  564
  594
  626
  660
  695
  731
  769
  810
  852
  896
  942
  990
  1,041
Total debt, $m
  623
  704
  788
  876
  967
  1,062
  1,160
  1,263
  1,369
  1,481
  1,596
  1,717
  1,843
  1,975
  2,112
  2,255
  2,405
  2,562
  2,726
  2,897
  3,076
  3,264
  3,461
  3,666
  3,882
  4,108
  4,345
  4,593
  4,853
  5,126
Total liabilities, $m
  1,092
  1,173
  1,257
  1,345
  1,436
  1,531
  1,629
  1,732
  1,838
  1,949
  2,065
  2,186
  2,312
  2,443
  2,581
  2,724
  2,874
  3,031
  3,194
  3,366
  3,545
  3,733
  3,929
  4,135
  4,351
  4,577
  4,814
  5,062
  5,322
  5,595
Total equity, $m
  953
  1,024
  1,097
  1,174
  1,253
  1,336
  1,422
  1,511
  1,604
  1,701
  1,802
  1,908
  2,018
  2,132
  2,252
  2,377
  2,508
  2,645
  2,788
  2,937
  3,094
  3,257
  3,429
  3,609
  3,797
  3,994
  4,201
  4,417
  4,645
  4,883
Total liabilities and equity, $m
  2,045
  2,197
  2,354
  2,519
  2,689
  2,867
  3,051
  3,243
  3,442
  3,650
  3,867
  4,094
  4,330
  4,575
  4,833
  5,101
  5,382
  5,676
  5,982
  6,303
  6,639
  6,990
  7,358
  7,744
  8,148
  8,571
  9,015
  9,479
  9,967
  10,478
Debt-to-equity ratio
  0.650
  0.690
  0.720
  0.750
  0.770
  0.790
  0.820
  0.840
  0.850
  0.870
  0.890
  0.900
  0.910
  0.930
  0.940
  0.950
  0.960
  0.970
  0.980
  0.990
  0.990
  1.000
  1.010
  1.020
  1.020
  1.030
  1.030
  1.040
  1.040
  1.050
Adjusted equity ratio
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  40
  50
  62
  74
  86
  99
  113
  127
  142
  158
  201
  218
  236
  255
  274
  295
  317
  340
  364
  389
  416
  444
  473
  504
  536
  570
  606
  644
  684
  726
Depreciation, amort., depletion, $m
  71
  74
  77
  79
  82
  85
  89
  92
  95
  99
  67
  70
  75
  79
  83
  88
  93
  98
  103
  108
  114
  120
  127
  133
  140
  147
  155
  163
  172
  180
Funds from operations, $m
  111
  124
  139
  153
  169
  185
  202
  219
  238
  257
  267
  288
  310
  333
  358
  383
  410
  437
  467
  498
  530
  564
  600
  637
  676
  718
  761
  807
  856
  906
Change in working capital, $m
  15
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  22
  23
  24
  26
  27
  28
  29
  30
  32
  33
  35
  37
  38
  40
  42
  44
  46
  48
  51
Cash from operations, $m
  96
  109
  123
  137
  152
  167
  183
  200
  218
  236
  246
  266
  287
  309
  332
  356
  382
  408
  436
  466
  497
  529
  563
  599
  636
  676
  717
  761
  807
  855
Maintenance CAPEX, $m
  -33
  -35
  -38
  -41
  -43
  -46
  -49
  -52
  -56
  -59
  -63
  -67
  -70
  -75
  -79
  -83
  -88
  -93
  -98
  -103
  -108
  -114
  -120
  -127
  -133
  -140
  -147
  -155
  -163
  -172
New CAPEX, $m
  -55
  -58
  -60
  -62
  -65
  -67
  -70
  -73
  -76
  -79
  -82
  -86
  -90
  -94
  -98
  -102
  -107
  -112
  -117
  -122
  -128
  -134
  -140
  -147
  -154
  -161
  -169
  -177
  -185
  -194
Cash from investing activities, $m
  -88
  -93
  -98
  -103
  -108
  -113
  -119
  -125
  -132
  -138
  -145
  -153
  -160
  -169
  -177
  -185
  -195
  -205
  -215
  -225
  -236
  -248
  -260
  -274
  -287
  -301
  -316
  -332
  -348
  -366
Free cash flow, $m
  8
  16
  25
  34
  44
  54
  64
  75
  86
  98
  100
  113
  127
  141
  156
  171
  187
  204
  222
  241
  260
  281
  303
  326
  350
  375
  401
  429
  459
  490
Issuance/(repayment) of debt, $m
  79
  81
  84
  88
  91
  95
  98
  102
  107
  111
  116
  121
  126
  131
  137
  143
  150
  157
  164
  171
  179
  188
  197
  206
  216
  226
  237
  248
  260
  273
Issuance/(repurchase) of shares, $m
  29
  20
  12
  3
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  108
  101
  96
  91
  91
  95
  98
  102
  107
  111
  116
  121
  126
  131
  137
  143
  150
  157
  164
  171
  179
  188
  197
  206
  216
  226
  237
  248
  260
  273
Total cash flow (excl. dividends), $m
  116
  118
  121
  124
  135
  148
  162
  177
  193
  209
  216
  234
  253
  272
  293
  314
  337
  361
  386
  412
  440
  469
  499
  531
  565
  601
  638
  677
  719
  762
Retained Cash Flow (-), $m
  -68
  -71
  -74
  -76
  -79
  -83
  -86
  -89
  -93
  -97
  -101
  -105
  -110
  -115
  -120
  -125
  -131
  -137
  -143
  -150
  -156
  -164
  -172
  -180
  -188
  -197
  -207
  -217
  -227
  -238
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  48
  47
  47
  48
  55
  66
  76
  88
  100
  112
  115
  129
  143
  158
  173
  189
  206
  224
  243
  263
  283
  305
  328
  352
  377
  404
  431
  461
  492
  524
Discount rate, %
  5.70
  5.99
  6.28
  6.60
  6.93
  7.27
  7.64
  8.02
  8.42
  8.84
  9.28
  9.75
  10.24
  10.75
  11.29
  11.85
  12.44
  13.06
  13.72
  14.40
  15.12
  15.88
  16.67
  17.51
  18.38
  19.30
  20.27
  21.28
  22.34
  23.46
PV of cash for distribution, $m
  45
  42
  39
  37
  40
  43
  46
  47
  48
  48
  43
  42
  40
  38
  35
  32
  28
  25
  21
  18
  15
  12
  9
  7
  6
  4
  3
  2
  1
  1
Current shareholders' claim on cash, %
  98.8
  98.1
  97.7
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6

Chart Industries, Inc. is a diversified global manufacturer of engineered equipment, packaged solutions, and value-add services used throughout the industrial gas, energy and biomedical industries. The Company operates through three business segments: Energy & Chemicals (E&C), Distribution & Storage (D&S) and BioMedical. The E&C and D&S segments manufacture products used in energy-related and industrial applications, such as the separation, liquefaction, distribution and storage of hydrocarbon and industrial gases. Through the BioMedical segment, it manufactures and supplies medical devices, including cryogenic and non-cryogenic equipment, used in respiratory healthcare. The Company also manufactures and supplies products for life sciences, including biological research and animal breeding. Applications in the BioMedical segment include Respiratory Therapy, Life Sciences, Commercial Oxygen and Nitrogen Generation.

FINANCIAL RATIOS  of  Chart Industries, Inc. (GTLS)

Valuation Ratios
P/E Ratio 83.8
Price to Sales 2.7
Price to Book 3.4
Price to Tangible Book
Price to Cash Flow 13.7
Price to Free Cash Flow 15.3
Growth Rates
Sales Growth Rate -17.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -69%
Cap. Spend. - 3 Yr. Gr. Rate -24.4%
Financial Strength
Quick Ratio 47
Current Ratio 0.1
LT Debt to Equity 33.6%
Total Debt to Equity 34.4%
Interest Coverage 7
Management Effectiveness
Return On Assets 2.6%
Ret/ On Assets - 3 Yr. Avg. -2.1%
Return On Total Capital 3.1%
Ret/ On T. Cap. - 3 Yr. Avg. -3.3%
Return On Equity 4.1%
Return On Equity - 3 Yr. Avg. -4%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 31%
Gross Margin - 3 Yr. Avg. 29.6%
EBITDA Margin 9.5%
EBITDA Margin - 3 Yr. Avg. 3%
Operating Margin 6.6%
Oper. Margin - 3 Yr. Avg. 0.2%
Pre-Tax Margin 4.4%
Pre-Tax Margin - 3 Yr. Avg. -1.7%
Net Profit Margin 3.3%
Net Profit Margin - 3 Yr. Avg. -3.1%
Effective Tax Rate 34.2%
Eff/ Tax Rate - 3 Yr. Avg. 21%
Payout Ratio 0%

GTLS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GTLS stock intrinsic value calculation we used $1084 million for the last fiscal year's total revenue generated by Chart Industries, Inc.. The default revenue input number comes from 0001 income statement of Chart Industries, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our GTLS stock valuation model: a) initial revenue growth rate of 7.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.7%, whose default value for GTLS is calculated based on our internal credit rating of Chart Industries, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Chart Industries, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of GTLS stock the variable cost ratio is equal to 76.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $194 million in the base year in the intrinsic value calculation for GTLS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Chart Industries, Inc..

Corporate tax rate of 27% is the nominal tax rate for Chart Industries, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the GTLS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for GTLS are equal to 66.6%.

Life of production assets of 22.1 years is the average useful life of capital assets used in Chart Industries, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for GTLS is equal to 17.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $884.5 million for Chart Industries, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 31.591 million for Chart Industries, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Chart Industries, Inc. at the current share price and the inputted number of shares is $2.4 billion.

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